CAISO’s top priority in 2021 will be making sure there is enough generating capacity for summer after last year’s shortfalls.

The ISO also will focus on the expansion of its Western Energy Imbalance Market, which is set to add multiple new entities in the coming months, and it will pursue plans to add a day-ahead market to the EIM by 2022.

The electrification of vehicles and buildings will pick up pace in 2021 in response to state and local requirements and abundant state funding.

And efforts to prevent Pacific Gas and Electric equipment from starting conflagrations heads into its fourth year. PG&E has a new CEO but remains under suspicion of starting yet another fatal fire in September.

RA ‘Job No. 1’

“Without question, resource adequacy is job No. 1 for California,” CAISO CEO Elliot Mainzer told RTO Insider in November. “We need to make sure we adapt to stay ahead of that reliability curve.” (See New CAISO CEO Vows Urgency on Resource Adequacy.)

CAISO is not waiting to start; its efforts kick off Jan. 6 with a multi-day workshop on resource adequacy enhancements. A final report on the causes of the August blackouts will also be released in January, it said. (See CAISO Says Constrained Tx Contributed to Blackouts.)

Much of the ISO’s work in the first half of 2021 will involve connecting hundreds of megawatts of battery storage to the grid by this summer to head off energy emergencies like those that hit the state during severe heat waves in August and September.

Those crises, including rolling blackouts Aug. 14-15 that shut off power to a million residents, happened in the early evenings as solar power ramped down and other resources proved insufficient. Batteries to store solar and wind power could be key to preventing shortfalls.

CAISO is working with the California Public Utilities Commission (CPUC) and the California Energy Commission (CEC) to ensure resource adequacy.

The CPUC approved 1,200 MW of lithium-ion batteries and other storage to come online in 2021, after ordering investor-owned utilities to procure 3,300 MW of new resources on a proportional basis. (See CPUC OKs 1.2 GW of Storage by 2021, 38,000 EV Chargers.)

The ISO is also seeking to keep some older gas plants operating, to limit exports during times of tight supply, and to increase its planning reserve margin from 15% to 20%. The CPUC must approve the increase. (See CAISO Board Fields RA Measures, Big and Small.)

CAISO and the two state commissions responsible for resource planning and procurement must cooperate to head off shortfalls, Mainzer said.

“I think it’s just clear California will not succeed and will not have an effective resource adequacy framework if the ISO and the CPUC and the CEC do not have that shared sense of tremendous urgency and focus and collaboration,” he said.

Industry experts are also urging Western utilities and state regulators to quickly address looming RA shortfalls in other parts of the West. (See Experts Urge West to Address RA Shortfall Immediately.)

“Our Northwest studies show that the Northwest has a problem,” Arne Olsen, senior partner with Energy and Environmental Economics, said during a WECC Resource Adequacy Forum in November.

A key interstate RA effort started taking shape last spring when the Northwest Power Pool began developing a voluntary program to address capacity deficits across an area spanning nine Western states. Rollout of a nonbinding measure is slated for this year, followed by a progressively binding program heading into 2024.

RA became a signature issue for WECC last year after an intensive survey of its members. The regional entity in December released its first Western Assessment of Resource Adequacy Report, which advised the Western Interconnection to adopt dynamic planning margins in response to the region’s growing reliance on variable resources. The report also called for increased coordination among balancing authorities around RA planning. WECC plans to release more detailed regional assessments in January and hold additional forums this year. (See Western RA Planning Must Change, WECC Says.)

EIM Expands; EDAM Advances

The largest number of entities to join the Western EIM in the same timeframe are scheduled to go live in early 2021.

Joining will be the Los Angeles Department of Water and Power, the largest municipal utility in the U.S.; Public Service Company of New Mexico, the state’s largest electric provider; and Northwestern Energy, which serves 735,000 electric customers across a vast area of Montana and South Dakota.

The Turlock Irrigation District, a water-and-electric utility in California’s Central Valley, and a second set of participants in the Balancing Authority of Northern California (BANC) will also go live early this year.

BANC Phase 2, as it’s called, includes the Modesto Irrigation District, the Western Area Power Administration’s Sierra Nevada region, and public utilities in the cities of Redding and Roseville. In Phase 1, the Sacramento Municipal Utility District (SMUD), the nation’s sixth largest municipal utility, joined the EIM.

“The success of Phase 1 BANC/SMUD and the benefits we’ve realized encouraged more of our public power members to participate,” BANC General Manager Jim Shetler said in a news release announcing the decision. “We expect the transition will be as smooth for Phase 2 as it was for Phase 1.”

Six other entities are scheduled to join the EIM in 2022: Avista, Tucson Electric Power, Tacoma Power, Avangrid, the Bonneville Power Administration and Xcel Energy of Colorado, bringing the total membership of the EIM to 22 entities spanning every state from the Rocky Mountains to the Pacific Ocean and including a large part of British Columbia.

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In addition to geographic expansion, CAISO is engaged in a stakeholder initiative to add a day-ahead market to the EIM, which currently operates only in real-time. The move could increase regional cooperation absent a Western RTO. (See CAISO Proposal Sets Course for EIM Day-ahead.)

PG&E and Wildfire Prevention

After emerging from bankruptcy in June, PG&E is trying to move past years of catastrophic wildfires caused by its equipment. Critics have accused the utility of neglecting its power lines for decades to increase profits.

One outspoken PG&E critic, federal Judge William Alsup, is overseeing the utility’s criminal probation on charges related to the 2010 San Bruno gas pipeline explosion. Recently he demanded PG&E explain its role in starting the Zogg Fire, which killed a mother, her young daughter and two others in rural Northern California in September. (See PG&E Line Was Active when Zogg Fire Started.)

On Dec. 29, Alsup proposed adding probation conditions to require “the convicted utility, in deciding which power lines to de-energize during windstorms, to take into account the extent to which power lines have or have not been cleared of hazardous trees and limbs as required by California law and the offender’s own wildfire mitigation plan.”

“This proposal is made to protect the people of California from yet further death and destruction,” the judge wrote. He noted PG&E has started 20 or more wildfires since its probation began in 2016, “killing at least 111 individuals, destroying at least 22,627 structures, and burning half a million acres.”

Alsup ordered PG&E to brief the matter by Jan. 20 with a hearing scheduled Feb. 3.

CPUC President Marybel Batjer also threatened PG&E with stricter monitoring because of its alleged lapses in trimming trees and maintaining its power lines. (See PG&E Faces ‘Enhanced Oversight’ by CPUC.)

“My concerns arose from what appears to be a pattern of vegetation and asset management deficiencies that implicate PG&E’s ability to provide safe, reliable service to customers,” Batjer wrote in a letter to PG&E interim CEO William Smith in November.

Patti Poppe, former CEO of Michigan’s CMS Energy, is scheduled to succeed Smith on Jan. 4. She will be the utility’s fourth chief executive in two years. (See Struggling PG&E Nabs CMS Energy’s CEO.)

Newsom Appointments

In December, Gov. Gavin Newsom appointed Batjer to a second term as CPUC president, reinforcing her authority over PG&E and her mandate to shake up the CPUC, which has often been criticized as slow to respond to current events. (See CPUC President Wants More Control over PG&E.)

Newsom will get to appoint a new member to the CPUC in 2021, after he named Commissioner Liane Randolph to head the California Air Resources Board (CARB). (See CPUC’s Randolph Named CARB Chair.)

And the governor must name a new member to CAISO’s Governing Body after former Chair David Olsen retired at the end of November. (See Ex-CAISO Board Chair to Retire.)

EVs and Building Electrification

California is moving faster than any other state to adopt electric vehicles and to electrify homes and buildings — a trend expected to accelerate in 2021.

In September, Newsom decreed that all new passenger vehicles sold in the state must be zero-emission vehicles (ZEVs) by 2035. Partly in response, the CEC and CPUC have allocated hundreds of millions of dollars to install tens of thousands of EV charging stations in shopping centers, workplaces and apartment complexes.

California currently has more than 725,000 electric vehicles and accounts for half of the nation’s EV sales, yet it remains far from reaching the ambitious targets set by Newsom and former Gov. Jerry Brown, who ordered that the state have 5 million ZEVs on the road by 2030.

The National Renewable Energy Laboratory estimated the state could need as many as 1.15 million chargers in public places and millions more in home garages to reach Brown’s goal. (See Can California Meet Its EV Mandates?)

CARB, which regulates vehicle emissions, told the CEC in August that automakers must double the pace of EV sales to deliver 5 million by 2030.

Building electrification picked up momentum in 2020 as local governments, from small towns to major cities such as San Jose, petitioned the CEC for permission to adopt ordinances that exceed state mandates for energy efficiency. (Calif. to Stay Course on Electrification, CEC Chair Says.)

California can only achieve its legal mandates to reach carbon neutrality and rely almost entirely on clean energy resources by midcentury if buildings are electrified, eliminating natural gas furnaces and water heaters, advocates said, including utilities and environmentalists. (See West Coast Pushes for Building Electrification.)

“The electrification of buildings represents an important opportunity to reduce greenhouse gas emissions from buildings both in the near term and long term, and can lead to consumer capital cost savings, bills savings and lifecycle savings in many circumstances,” Southern California Edison said in an April 2019 report.